Almost 40% of employees from food delivery startup Foodpanda’s Romania office have been asked to leave the company since Spanish speedy grocery unicorn Glovo acquired the business, Sifted has learnt.
The company had 236 employees before the acquisition and the majority of outgoing staff are from the delivery company’s call centre. Their jobs will now be done with outsourced workers. In total 89 Foodpanda staff were asked to leave the company, with the majority asked to sign “mutual agreements” in late January.
The acquisition was announced in May 2021 amid a series of other Glovo buyouts in the region, that saw the company pick up several smaller food delivery businesses including Foodpanda Bulgaria, Pauza in Croatia and Donesi in Serbia, Montenegro and Bosnia and Herzegovina.
Three current and former Foodpanda Romania staff tell Sifted that they were led to believe that no one would lose their jobs, and that Glovo did not handle the process with empathy.
Glovo said 'We will not fire anyone'
While layoffs are not uncommon after an acquisition, Foodpanda staff say they reached out to Sifted not because of the decision to ask people to leave, but the way in which it was handled.
“Representatives of Glovo came to Romania when they announced the merger,” says Julia*, a former senior employee of Foodpanda who was asked to leave the company this year. “They told us, ‘Guys look, we will not fire anyone because we want to build a regional team and a local team here in Bucharest. We want to keep each and every one of them because you have huge results here.’”
Responding to this claim, Glovo tells Sifted that representatives “did not make such promises or statements”. Glovo says their message at the time “focused on the appreciation of the work done by employees of Foodpanda and the fact that Glovo’s intention was to make the process as easy and transparent as possible with as little impact on people as possible”.
But Julia says she, like many other Foodpanda managers, felt reassured enough by the meeting that they passed the message onto their employees. “We told [our teams] that we will keep them all, because that's what they told us.”
What I cannot understand and what upset me was the way they handled things. It was not human
Kristoph*, a senior employee who’s still at the company, also tells Sifted that Glovo made Foodpanda employees feel as though they would be needed after the acquisition had gone through.
“The message was that there is a lot of work, there is a lot of space for people… so even though this is happening, the main focus is to find a place for everyone, because we need you,” he says.
Foodpanda staff tell Sifted that it wasn’t until the middle of January this year that people began hearing rumours that layoffs might be coming. But some people had their doubts that Glovo would retain call centre workers given the fact it also outsourced customer support teams at its pre-existing Romania HQ.
Glovo says that the decision to outsource workers was made “in line with Glovo's global strategy, to outsource this unit due to costs and scalability long-term” after a “careful evaluation of the local setup”.
Commenting on Foodpanda Romania employees’ claims, Christopher Kummer, president of the Institute for Mergers, Acquisitions and Alliances think tank, said that companies taking control of other businesses should always be as transparent as possible about plans to reduce staff.
“In an acquisition, you should always tell people right away what will really happen. If it might be part of the integration plan to reduce staff — then don’t say the opposite,” he says.
Fired on Zoom
“I can understand big companies’ decisions. I can understand that Glovo’s way of working is not supporting that many [call centre] agents because they are working with outsourced companies. But what I cannot understand and what upset me was the way they handled things. It was not human,” says Kristoph.
He says that team leaders were invited to two back-to-back Zoom meetings on January 21, 2022, with team members only invited to the second, half-hour call.
“It was the first time I heard about [the job cuts] officially and right after our meeting ended, the other meeting started with everybody,” he says.
Julia adds that, while 30 minutes was scheduled for the call, employees weren’t given the chance to ask questions about the decision.
“Unempathetic does not cover it. There were more than 100 people on this call. He didn't allow them to place any questions at the end. And at the end, after 20 minutes, he told them guys, ‘I have another call, I need to leave.’ And he left the call, and was the meeting organiser, so the call just ended,” she says.
“They asked one lady to leave who was 14 weeks pregnant. Now she’s applied for three or four jobs but nobody wants to hire her because she's pregnant.”
Responding to this claim, Glovo says: “The position was eliminated due to restructuring post-migration. The employee did not accept the offer put forward by Glovo.”
They asked one lady to leave who was 14 weeks pregnant. Now she’s applied for three or four jobs but nobody wants to hire her because she's pregnant
The former and current staff tell Sifted that Glovo then sent couriers to employees’ homes, delivering contract termination agreement documents in an effort to get them signed before the end of the month.
“These very young call centre agents were taken completely by surprise, they felt pressure to sign quickly,” says Ben*.
“They should have handled this in a million other ways that were more human,” adds Kristoph.
The Foodpanda Romania staff that spoke to Sifted accept that Glovo handled the situation legally, but Kummer adds that leaders managing acquisitions should try to offer more than the bare minimum to outgoing staff.
“Some people think you only have to offer the legal minimum — that’s bad planning. As an acquirer you must consider that this doesn’t only affect the people you let go, but also impacts the morale of people you keep,” he says. “It sounds to me that the acquisition was not well prepared or advised.”
Glovo says that employees had been given the chance to ask questions on the second Zoom call, and said that couriers had been sent to employees homes only “in selected cases where employees were not able to come to the office”.
A poor business decision?
Aside from the way people were fired, the former Foodpanda employees also tell Sifted that they saw evidence that outsourced workers would actually cost the business more money than in-house staff.
“You might say that it's maybe cost optimisation and cost efficiency. It's not and we have seen the numbers: they have higher costs than we had by three to four times per order,” says Julia.
“We've seen the fact that their outsourced services costs were nearly four times higher. Financially speaking, it would have been a very good decision to keep services in house,” adds Ben.
“I tried a lot to explain that it's much better if you have inside [call centre] agents, we all tried to explain that. These more than 80 people that were asked to go were very experienced people, they had good know-how, they were well trained. We worked with them on a daily basis and teams were formed. I didn’t understand it,” says Kristoph.
Glovo says it is unable to provide information on whether outsourced workers would cost the company more.
While Julia says she's come to terms with the loss of her job and Foodpanda’s operations, she says that she spoke out about the acquisition because it’s important that Glovo management learns the impact it’s having on its people.
“They are currently raising a very bad type of manager,” she says, referring to the way that Glovo’s leadership dealt with the acquisition.
Glovo says that its workforce has more than doubled in just over a year, leading to a 60% increase in people manager roles.
“We acknowledge the responsibility of a manager and its impact on others and this is why we’ve developed a dedicated leadership programme called ‘Leading @ Glovo’ for all people managers to unify the management approach,” Glovo sats. “Consistent growth and learning of our leaders is paramount.”
*All names of current and former Foodpanda employees have been changed to protect their anonymity.